Exemption under Notification No. 175/86 cannot be denied for lack of SSI registration or declaration if substantive conditions were met.

A manufacturer could claim exemption under Notification No. 175/86 despite not being registered as a small-scale industry and despite not filing a declaration, because entitlement depended on the substantive condition in para 4(b): having availed of the exemption and stayed within the prescribed limit in the preceding financial year. The undisputed clearance figures showed that condition was satisfied. Absence of SSI registration or licensing formalities did not, by itself, defeat exemption where the notification's substantive requirements were met. The Tribunal therefore treated denial of the benefit for the relevant classification lists as unjustified.

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Issues: Whether a manufacturer that was not registered as a small scale industry and had not filed a declaration could nevertheless claim exemption under para 4(b) of Notification No. 175/86 for the relevant years.

Analysis: The factory had cleared goods within the prescribed exemption limit in the preceding financial years, and those figures were not disputed. The exemption scheme in para 4(b) turned on whether the manufacturer had been availing of the exemption during the preceding financial year. The absence of SSI registration or filing of declaration for licensing purposes did not, by itself, defeat entitlement to exemption where the substantive conditions of the notification were otherwise satisfied. The view taken was consistent with the Tribunal's earlier approach that exemption eligibility is independent of licensing control or declaration formalities.

Conclusion: The appellants were entitled to exemption under Notification No. 175/86, and the denial of the benefit for the relevant classification lists was not justified.

Ratio Decidendi: Non-filing of a declaration or absence of SSI registration does not bar exemption under the notification when the manufacturer satisfies the substantive condition of having availed of, and remained within, the prescribed exemption limits in the preceding financial year.

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